Bulgaria Household Wealth Dives BGN 83 B over Financial Crisis

Kristofor Pavlov, chief economist at UniCredit Bulbank, said that savings currently account for about six to seven per cent of Bulgarians’ disposable income. Photo by BGNES

Kristofor Pavlov, chief economist at UniCredit Bulbank, has stated that Bulgarians’ household wealth has dived by BGN 83 B since the property bubble burst.

Pavlov, speaking in Dubrovnik at the ‘Euromoney Regional Finance and Investment Conference for South East Europe’, stated that property prices in Bulgaria have been reduced by around 20%.

Pavlov explained that hard times have prompted Bulgarian households to save more and consolidate debts. He added that bad loans in Bulgaria would be average for Europe in 2010.

Savings currently account for about six to seven per cent of Bulgarians’ disposable income. About 70-80 per cent of households' financial assets are parked with deposits and so domestic demand will not help the economy recover, Pavlov said.

He concluded that the Bulgarian economy would pull itself out of recession in the second quarter of 2010 but recovery would be painful.

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